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PETITIONER: PANKAJ BHARGAVA AND ANR.

       Vs.

RESPONDENT: MOHINDER NATH AND ANR.

DATE OF JUDGMENT11/12/1990

BENCH: VENKATACHALLIAH, M.N. (J) BENCH: VENKATACHALLIAH, M.N. (J) OJHA, N.D. (J) VERMA, JAGDISH SARAN (J)

CITATION:  1991 AIR 1233            1990 SCR  Supl. (3) 508  1991 SCC  (1) 556        JT 1990 (4)   628  1990 SCALE  (2)1251  CITATOR INFO :  RF         1992 SC1555  (2,16,20)

ACT:     Delhi Rent Control Act, 1958: Sections 21 and 39--Tenan- cy  for limited period---Rent Controller on basis of  admis- sions  of parties granting permission--Whether can be  chal- lenged in collateral proceedings. Appeal--’Substantial question of law’--What is.     Code   of  Civil  Procedure,  1908:  Section   9---Civil Court--Jurisdiction  of--Competence  to  take  decision--The test.     Indian  Contract Act, 1872: Section  8--Stipulation  for payment of rent--Whether brings about a contract of tenancy.     Transfer     of    Property    Act,    1882:     Section 105--Lease--Yearly     rent    paid    by     cheque--Cheque returned--Effect on lease--What is. Words & Phrases: ’Substantial question of law’--Meaning of.

HEADNOTE:     The appellants and the respondents by their joint appli- cation  to the Rent Controller sought for and obtained  per- mission for a limited tenancy, under Section 21 of the Delhi Rent  Control Act, 1958. The Respondents not having  surren- dered possession upon the expiry of the said period of  five years, the appellants commenced proceedings for re-delivery. Respondents resisted the proceedings raising several conten- tions. They urged that the appellants were not the owners of the  premises at all; that the permission under  Section  21 was  vitiated by fraud resulting from a suppression  by  the appellants  of the material fact that at the  relevant  time the  premises  was not available for letting  at  all;  that respondents  having been inducted into possession as  tenant from  March 5, 1978 itself, one of the basic  jurisdictional requirements  for the grant of permission under  Section  21 was  absent,  and  that at all events  a  fresh  contractual tenancy  had  been created with effect from  April  6,  1983 immediately  upon  the expiry of the five year term  of  the limited tenancy. 509     The  Rent Controller rejected all the aforesaid  conten-

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tions and made an order granting possession.     The respondents’ appeal before the Rent Control Tribunal was unsuccessful, but the second appeal under Section 39  of the  Act was allowed by the High Court which held that  even prior  to the limited tenancy the respondents had  been  in- ducted  into  possession  as tenants;  that  the  subsequent permission  for the limited tenancy was a mere pretence  and the result of a fraud on the statute and therefore a  nulli- ty,  and relying on this Court’s decision in  Subhash  Kumar Lata  v.  R.C.  Chhiba, [1988] 4 SCC 709 held  that  such  a nullity  could be pleaded in and against execution as  well. It accordingly reversed the orders of the authorities below, and dismissed the appellants’ claim for possession.     In the landlords’ appeal to this Court it was  contended that: (1) both the Rent Controller and the Appellate  Tribu- nal  having  concurrently held that  with  the  respondents’ occupation  of the premises from March 5, 1978 to  April  5, 1978 even if true, did not constitute a tenancy in that  the other requisite indicia of such tenancy, namely, the  stipu- lation  of a consideration was absent and that being a  pure question  of fact, the High Court in exercise of its  juris- diction under Section 39 which permitted only an appeal on a substantial  question  of  law could  not  reappreciate  the evidence and upset the finality of that finding of fact, (2) that  even if the limited tenancy under Section 21  was  ob- tained despite the subsistence of a tenancy created earlier, the  respondents  were bound to assail the validity  of  the limited tenancy during its subsistence and not as a  collat- eral  plea in the course of execution, (3) Even if  the  re- ceipt  Ex. D.W.1/3 was susceptible of an inference that  the transaction  envisaged by it was one of lease could be  said to be a question of law, by no standards it could be said to be a substantial question of law within the meaning and  for the purposes of Section 39 of the Act.     On behalf of the tenants it was urged that Section 21 to the  extent  it runs counter and forms an exception  to  the general scheme of the statute its operation was required  to be  restricted  severely  to the  expressed  conditions  and limitations  contained  in that section  and  that  wherever permission  for  a limited tenancy was sought  and  obtained suppressing  any jurisdictional fact such as that  the  pro- spective  limited  tenant  was already in  occupation  as  a regular  tenant, the transaction amounted to a fraud on  the statute  rendering the permission void ab initio,  that  the jurisdiction  of the Rent Controller to grant permission  is conditional  and  that if the conditions  upon  which  alone permission  can  be  granted are  not  fulfilled  permission cannot be granted in invitum 510 and  that consequently the landlord cannot  recover  posses- sion. Allowing the appeal, this Court,     HELD:  1(a)  The receipt dated March 5,  1978  on  which Respondents  relied  contained a recital that a  cheque  for Rs.18,000 mentioned in it was given as rent for the premises for the period of. 12 months w.e.f. March 5, 1978. The  Rent Controller and the Tribunal, quite erroneously, proceeded to hold  that the mere fact that the cheque had been  shown  to have been returned had the effect of taking away the consid- eration  for the lease. These authorities mistook  the  non- payment of rent in point of fact as equivalent to absence of consideration  in point of law. This was clearly  erroneous. [515D]       A stipulation for payment of rent was by itself suffi- cient to bring about a contract of tenancy where, of course,

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the  other element of exclusivity of possession  was  shown. The  High  Court held that a consideration  promised  is  as valid  as  one paid, and that, therefore,  the  circumstance that  the  cheque was returned would not  detract  from  the legal consequence of the stipulation to pay rent implicit in Exhibit  DW  1/3. The High Court construed the  receipt  and found that a lease was intended. [515E]     2.  The construction of a document which is the  founda- tion of the rights of the parties raises a question of  law. An  inference from facts admitted or found is a question  of law  if such an inference is to be drawn on the  application of proper principles of law to the facts. Such determination is a mixed question of the fact and law. The submission that the  High  Court treaded on the forbidden  ground  of  facts cannot therefore be accepted. [515F]     3.  What is a ’substantial question of law’  would  cer- tainly depend upon facts and circumstances of every case. If a  question of law had been settled by the highest court  of the country that question however important and difficult it may have been regarded in the past and however large may  be its  effect on any of the parties, would not be regarded  as substantial question of law. [515H]      Raghunath Prasad  v. Deputy Commissioner of Partabgarh, [1927]  54 I.A. 126; Sir Chunilal V. Mehta and Sons Ltd.  v. The  Century  Spinning and Manufacturing  Co.  Ltd.,  [1962] Supp.  3 SCR 549 at 557 and 558 and Union of India  v.  M/s. Chaman Lal & Co., AIR 1957 SC 652 at 655 & 656, relied on. 511     Kaikhushroo  Pirojsha  Ghaira  v. C.P.  Syndicate  Ltd., [1948]  I.  Bom. L.R. 744; Dinkarrao  v.  Rattansey,  I.L.R. (1949) Nag. 224 and Rimmalapudi Subba Rao  v. Noony Veeraju, I.L.R. 1952 Mad. 264, referred to.     4(a)  In view of the pronouncements of this Court as  to the limitations on the permissible challenge to the exercise of  jurisdiction under Section 21, any appeal to the  remedy based  on concept of nullity and collateral attack is  inap- propriate. [521H]     (b)  In a collateral challenge the exercise is  not  the invalidation  of a decision, but only to  ascertain  whether the  decision "exists" in law at all and to rely upon  inci- dents  and  effect of its  "non-existence".  The  permission granted  must be presumed to be valid till set  aside.  Doc- trine  of collateral challenge will not apply to a  decision which is valid ex-hypothesis and which has some  presumptive existence,  validity and effect in law. Such a decision  can be  invalidated  by the right person in  ’right  proceedings brought  at  the right time. It is only a  nullity  stemming from  lack  of inherent jurisdiction or  a  proceeding  that wears  the  brand of invalidity on its forehead  that  might afford a defence even against enforcement. Such a collateral challenge  may  not be available where there is no  lack  of inherent  jurisdiction  but  what is disputed  is  only  the existence or non-existence of facts which though  collateral to the merits do require investigation into and adjudication upon  their existence or non-existence on the basis of  evi- dence. If the parties before the Rent Controller have admit- ted  that the fact or the event which gives  the  Controller jurisdiction is in existence and there was no reason for the Controller to doubt the bona fides of that admission as to a fact or event, the Controller is under no obligation to make further  enquiries on his own as to that factual state.  The test of jurisdiction over the subject matter is whether  the Court or Tribunal can decide the case at all and not whether the court has authority to issue a particular kind of  order in the course of deciding the case. [522A-E]

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Subhash  Kumar Lata v. R.C. Chhiba, [1988] 4 SCC  709,  com- mented upon.     S.B.  Naronah v. Prem Kumari Khanna, [1980] 1  SCR  281; J.R.  Vohra v. Indian Export House Pvt. Ltd., [1985]  2  SCR 899; Shiv Chander Kapoor v. Amar Bose, [1990] 1 SCC 234  and Yamuna Maloo v. Anand Swarup, [1990] 3 SCC 30, explained. Joginder  Kumar Butan  v. R.P. Oberoi, [1987] 4 SCC 20,  re- ferred to. 512     5.  The  expression ’fraud on the statute’ is  merely  a figurative description of a colourable transaction to  evade the  provisions of a statute and does not, for  purposes  of choice  of  the remedy, distinguish itself from  the  conse- quences  of fraud as vitiating the permission under  Section 21. [523H-524A]     6.  Permission  under  Section 21 for  letting  out  the premises  to the same tenant for limited periods  more  than once  successively  would  not by itself  and  without  more vitiate the subsequent grants. In one sense, the  successive grants  of  permission would share, the  characteristics  of post-facto grant. [524B] Dhanvanti v. D.D. Gupta, [1986] 3 SCC 1, relied on.     7. The jurisdiction of a court depends upon its right to decide  the  case and not upon the merits of  its  decision. [522G]     Hugh  B. Cox. "The Void Order and the Duty to Obey",  16 U.Chi. L.Rev. 86 (1948), relied on.

JUDGMENT: